Retail formats

Introduction


The most promising and booming industry of future is retailing. AT Kearney Robert Covington Jersey , a well-known international management consultancy, recently identified India as the ‘the most attractive retail destination’ globally from among thirty emergent markets (2007). According to a Knight Frank survey, India ranks fifth amongst the 30 emerging retail markets in the developing countries. India has witnessed a frenetic pace of retail development over the past five years. Goldman Sachs has estimated that the Indian Economic growth could actually exceed that of China by 2015. It is believed that the Country has potential to deliver the faster growth over the next 50 years. As we all know that India has been a nation of Dukandars, having –approximately 12 million retailers. Obviously retailing is in our blood –either as a shopkeeper or as a shopper. The Indian Retail market is estimated to grow from the current US $ 330 billion to US $ 427 billion by 2010 & U. S. $ 637 by 2015. Retail which contributes 10% of our GDP is the largest source of employment after agriculture. There is increased sophistication in the shopping pattern of customers, which has resulted to the emergence of big retail chains in most metros; mini metros and towns being the next target. Customer taste and preferences are changing leading to radical transformation in lifestyles and spending patterns which in turn is giving rise to new business opportunities.


Evolution of retail industry


Traditionally, retailing in India can be traced to the emergence of the Corner stores (Kirana) catering to the convenience of the consumers. Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission. 1980s experienced slow change as India began to open up economy. Textile sector with companies like Bombay Dyeing Dario Saric Jersey , Raymond’s, S Kumar’s and Grasim, saw the emergence of retail chains. Later, Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches. The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers. For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books. 1995 onwards saw an emergence of shopping centers, mainly in urban areas Richaun Holmes Jersey , with facilities like car parking targeted to provide a complete destination experience for all segments of society. Emergence of hyper and super markets trying to provide customer with 3 V’s –


ü Value


ü Variety


ü Volume


Expanding target consumer segment: The Sachet revolution - example of reaching to the bottom of the pyramid. At year end of 2000 the size of the Indian organized retail industry was estimated at Rs. 13,000 crore. The retail industry is divided into organized and unorganized sectors. Organised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets Timothe Luwawu Jersey , retail chains, and also the privately owned large retail businesses. Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the Corner stores (Kirana shops); owner manned general stores Amir Johnson Jersey , Cigarette stalls (paanbeedi), convenience stores, hand cart and pavement vendors, etc.


Indian Retail Structure


Retailing in India is currently estimated to be a US$ 230 billion industry, of which organized retailing makes up 3 percent. By 2010, organized retail is projected to reach US$ 30 billion with an expected growth rate of about 400%. A study conducted by Fitch Justin Anderson Jersey , expects the organized retail industry to continue to grow rapidly, especially through increased levels of penetration in larger towns and metros and also as it begins to spread to smaller cities and B class towns. Fuelling this growth is the growth in development of the retail-specific properties and malls. According to the estimates available with Fitch, close to 25mn sq. ft. of retail space is being developed and will be available for occupation over the next 36-48 months. Fitch expects organized retail to capture 15%-20% market share by 2010. While organised retail makes up for over 70-80 per cent of the total business in developed countries, the Indian organised retail segment pales in comparison with other Asian countries such as China, South Korea and Thailand. Retailing is the largest private sector industry in the world economy, with the global industry size exceeding $6.6 trillion Jerryd Bayless Jersey , according to Euromonitor. In China, the organised retail segment accounts for about 20 per cent of the overall business; in Thailand, it is around 40 per cent, while in Malaysia it makes up for nearly 50 per cent of the total business, according to the data.






Current retail format


The retail sector in India is highly fragmented and organized retail in the country is at a very nascent stage. Of the 12 million retail outlets, more than 80 per cent are run by small family business Darryl Dawkins Jersey , which use only household labour. China and Brazil, took 10-15 years to raise the share of their organized retail sectors from 5 per cent to 20 per cent and 38 per cent respectively. India too is moving towards growth and maturity in the retail sector at faster pace, according to Ernst and Young India.




Retail formats


2009